NEWS RELEASE

May 28, 2010
PR-10/21
For additional information:
Jason Hammersla
202-289-6700

Passage of pension funding relief a crucial step toward economic recovery, but long-term solutions still needed

WASHINGTON, DC — "The passage of defined benefit pension plan funding relief, as part of the House of Representatives tax 'extenders' bill, will help save jobs across America," said American Benefits Council President James A. Klein today. "While we remain concerned with many of the restrictions and conditions placed on the relief, we believe that the measure is critical to the nation's continued economic recovery."

The American Jobs and Closing Tax Loopholes Act (H.R. 4213) gives pension plan sponsors additional time to account for the losses brought about by a "perfect storm" of economic factors, including depressed financial markets, low interest rates and the 2006 pension funding rules. "This legislation will allow employers to responsibly fund their retirement plans while also investing in jobs and growth," Klein said.

"We commend Representatives Earl Pomeroy (D-ND) and Pat Tiberi (R-OH), who tirelessly championed practical legislation that gives plan sponsors the needed tools to manage soaring pension obligations — obligations that have impeded economic recovery and hurt workers. If all members of Congress worked in such a constructive, bipartisan fashion, many more of the nation's challenges could be responsibly addressed," Klein said.

The extenders bill also imposes new disclosure requirements on employer-sponsored 401(k) plans. "Voluntary employer sponsorship of these plans is essential for the future financial security of millions of working Americans. While we greatly appreciate the inclusion of a "good faith" standard for interpreting the legislation until official guidance is released, we remain concerned about the practical challenges of implementation," Klein said.

Going forward, it will be essential for lawmakers to address the persistent volatility and unpredictability of defined pension funding. "Improving the pension funding rules will not only insulate American companies against future economic hardships, it will improve employers' ability to sponsor these generous retirement plans for their workers," Klein said.

To arrange an interview with Klein or other Council staff on pension funding matters, please contact Jason Hammersla, Council director of communications, at 202-289-6700 (office) or (202) 253-5458 (cell).

The American Benefits Council is the national trade association for companies concerned about federal legislation and regulations affecting all aspects of the employee benefits system. The Council's members represent the entire spectrum of the private employee benefits community and either sponsor directly or administer retirement and health plans covering more than 100 million Americans.